Question

Handel Company uses the allowance method for estimating uncollectible accounts.

January 5 Sold merchandise to Terry Richman for $2,000, terms n/15.
April 15 Received $600 from Terry Richman on account.
August 21 Wrote off as uncollectible the balance of the Terry Richman account when she declared bankruptcy.
October 5 Unexpectedly received a check for $300 from Terry Richman. It is not felt any more will be received from Richman.
Prepare journal entries to record the above transactions: (Credit account titles are automatically indente

Answer 1

Entries are given below

Step-by-step explanation:

January 5 - Sold Merchandise

DEBIT CREDIT

Receivable - Terry $2,000

Sales Revenue $2,000

April 15 - Received $600 from terry

DEBIT CREDIT

Cash $600

Receivable - Terry $600

August 21 wrote off uncollectable debt

DEBIT CREDIT

Allowance for debt (2000-400) $1,400

Receivable - Terry $1,400

October 5 Received a check

DEBIT CREDIT

Receivable - Terry $300

Allowance for doubtful debt $300